Can the answer to what ails the global
economy be found in the people in blue
vests at your neighborhood Walmart?What most store employees probably didn’t know was that Mr. McMillon and his executive team, who had been promoted into their jobs a year earlier, were under extraordinary pressure from investors. They needed to reverse a slide in business and fight off threats in all directions — dollar discounters on the low end, Amazon online, direct competitors like Target
.. “Walmart U.S.’s relentless focus on costs does seem to have taken some toll on in-store conditions and stock levels,” they wrote. The analysts wryly added: “If an item is not on the shelf, you cannot sell it.”
.. The company had been busy raising profits by cutting labor costs. The number of employees in the United States fell by 7 percent from early 2008 to early 2013, for example, a span in which the square footage of stores rose 13 percent.
.. Walmart had become viewed as a last-ditch option for employment — not the place that ambitious people might want to work. They were under such pressure to keep labor costs low that the employees they hired showed little loyalty or career-building devotion to their jobs.
.. To macroeconomists, it suggested that a falling unemployment rate was finally creating the response that theory suggests it should: employers raising wages to attract the workers they need.
.. And executives really had concluded that customer service woes and slumping sales were because of underinvestment in employees.
.. And the actions far well short of what Zeynep Ton, an associate professor of operations at the Sloan School of Business at M.I.T., calls a “good jobs strategy,” in which a retailer builds its entire operating philosophy around better-compensated staff members who are empowered to make decisions.
.. An employee making more than the market rate, after all, is likely to work harder and show greater loyalty
.. What is interesting about this is that, if you look at what’s ailing the broader United States economy, it looks a lot like what you would expect if employers were, en masse, failing to understand the possibility of efficiency wages.
.. Individually, employers may think they are making rational decisions to pay people as little as possible. But that may be collectively shortsighted, if the unintended result is less demand for the goods and services they are all trying to sell to these same people.
.. “Out of the gate, they’ve seen some improvement, but I think that’s because they were doing Retail 101 so poorly,” said Brian Yarbrough, a retail analyst at Edward Jones & Company. “The better question is what happens next year and the following year. The low-hanging fruit has been harvested.”
On the Many Ways to Spin Statistics
From household income to capital gains, there are boundless possibilities for spinning numbers to score political points.
There are millions more people in the top 20 percent of households than in the bottom 20 percent of households. The number of households is the same but the number of people in those households is very different. In 2002, there were 40 million people in the bottom 20 percent of households and 69 million people in the top 20 percent.
.. Capital gains received in a given year can be paid for value accrued over a number of years. If you paid $100,000 for a home or a business in the past, and then sold it 20 years later for $300,000, have you made $200,000 per year when you sold it or $10,000 a year for 20 years?
A Middle-Class Stronghold’s Uncertain Future
About 63 percent of adults in Sheboygan make between $41,641 and $124,924, meaning the area has one of the highest shares of middle-class households in the country, according to a report from the Pew Research Center. Nationally, only 51 percent of adults are middle-class.
Wisconsin is, for the middle class, the promised land. Four out of the top 10 metropolitan areas with the highest share of middle-income families are in Wisconsin ..
.. Those areas have what other parts of America once had in spades: a big manufacturing sector, strong unions, good schools, and a low cost of living.
.. Pew defines middle-income households as those with an income two-thirds to double that of the overall median household income.
.. In Sheboygan, middle-class median income fell 17 percent, from $80,281 to $66,719, according to Pew. This was the biggest drop in income of any middle-class area, though nationally, middle-class households lost ground in 222 of 229 metropolitan areas from 1999 to 2014.
.. The only way the company could stay and remain competitive was to pay the same low wages that new manufacturing employees made in the rest of the country, he wrote.
.. Now, workers like Bob Bastasic still earn $34 an hour at Kohler, but new employees can’t make much more than $18.
.. The share of Americans living in middle-class households has declined to just over 50 percent today, from 61 percent in 1970
.. They turn people who were once full-time employees into contractors, cut back on wages and benefits, and do everything possible to maximize productivity without sharing those gains with the workers.
.. Those with very high wages make 41 percent more than they did in 1979, while middle-wage workers earn just 6 percent more
.. the size of the upper-middle class, defined as a family-of-three making at least $100,000, grew to 29.4 percent of the population in 2014, from 12.9 percent in 1979.
.. Indeed, in 1979, the poor and middle class earned 70 percent of all incomes and the rich and upper middle class earned 30 percent, according to the Urban Institute. By 2014, those groups had swapped, with the poor and middle class earning just 37 percent of all incomes, with the rich and upper middle class earning 63 percent
Do you Make More Money than Mozart?
Last month we explored what the annual salary of some of history’s most famous scientists would be if they were being paid today. As it was so much fun we decided to revisit the topic, but instead took a look at some of the most iconic composers from Europe (and one from America).